LOWER EAST SIDE (PIX11) – ‘Take a loan or else.’ That’s the deal small businesses in the city are being offered as they try to emerge from Sandy. And many are not taking the deal and closing up altogether.
Merchants are navigating through a number of different loan possibilities, though some tell PIX11 News taking on more debt is exactly what they do not need. For Gabrio Tosti of DeVino Wine Boutique on Clinton street, it began with a meeting small businesses were invited to in which officials “pushed” them to take on a commercial loan. The loan, carries a 4% interest while the federal fund rate loaning money to banks is 0.25%. The difference: 3.75% of profit, brings Tosti to say of the banking industry’ “they have enough gifts from us, no?!”
On his single block on Clinton street alone, 4 businesses have closed down. Others, including the Desert Truck, are slated to close Jan 1st. Tosti and others, including City Council Member Margaret Chin are urging the city to directly award grants to businesses that qualify or at least offer the matching grant to all Sandy relief loans. “They need to figure out how to award these grants efficiently to get these businesses back on their feet,” Chin said “…in the balance are a countless number of jobs in our community.”
Two other solutions that have been proposed are to delay or reduce sales or property taxes on commercial businesses. Businesses withhold sales taxes charged to customers to pay the government in intervals. The next payment is due around December 20th, and by all indication, most of the businesses in Lower Manhattan have yet to see the commerce generated from a traditional holiday shopping season.
City Council Member Chin is amongst those who are pleading with Mayor Bloomberg and Gov. Cuomo to simplify aid to small businesses, but as of this writing, the loan based relief system is the only avenue available to small business owners.
Note: inquiries to City Hall and Gov. Cuomo’s office on this matter were not returned. This article will be updated if that changes.